MOF is not beholden to anybody, says Johari on 1MDB debt settlement

The Finance Ministry (MOF) will not be indebted to the Chinese government when deciding on any future development projects in Malaysia, said Second Finance Minister Johari Abdul Ghani. 

He said this when asked if the ministry feels beholden to China following news that Chinese firms helped MOF-owned 1MDB to settle its debts to the International Petroleum Investment Company (IPIC) by acquiring the latter's assets. 

"No, we are not beholden to anybody," said Johari when attending an event at MOF.

On Dec 28, Singapore's Straits Times had reported that divestment of 1MDB assets to companies from China helped raised funds to repay a US$602.7 million debt to IPIC by year-end.

Johari, however, said he was not aware if such transaction had taken place.

"I am not aware of all this, you got to ask Irwan (Serigar Abdullah), as being the chairman of 1MDB, he would be able to answer," he said. 

The Straits Times report, quoting sources, said the settlement was made possible by the sales of financial instruments and stakes by two 1MDB-related entities, which held land in northern Penang and in Port Klang. 

"Malaysian government officials declined to identify the buyers in the real estate transactions but one financial executive close to the situation said that the equity interests in the 1MDB real estate entities were acquired by 'concerns ultimately controlled by Chinese state-owned enterprises'.

"The executive declined to elaborate," read the report. Malaysiakini is unable to independently verify the claims.

1MDB claims to have acquired 234 acres of land in prime land in Ayer Itam, Penang for RM1.38 billion in 2013, but the Penang state government has disputed this. 

In Selangor, 1MDB acquired a 310-acre piece of land near in Pulau Indah near the Port Klang Free Zone in 2014.

The influx of mega investments from China has raised concerns that local players will be losing out in the competition.

It was reported China's national rail operator is putting together the country's largest railway team ever ahead of the Kuala Lumpur-Singapore High-Speed Rail (HSR) bid.

Earlier this year, a parliamentary reply revealed that Putrajaya has granted the RM55 billion project of East Coast Rail Link (ECRL) to China Communications and Construction Company (CCCC) to secure a loan from China Exim Bank.

- Mkini